Homeowners confused about when interest rates will rise, with economists Cebr predicting a hike before the year is out

Six out of ten homeowners say they are confused about when interest rates are likely to rise, a report has found.

The majority say changing views from experts, family members and differing statements from politicians and regulators are the main source for confusion.

The poll of 2,000 homeowners also found 46 per cent cannot recall the current Bank of England base rate, despite some having mortgages linked to it.

Mark Carney: The Bank of England chief and his policymakers are yet to increase base rate from its historic low of 0.5%

Half of those with a variable rate mortgage were not sure their payments will increase in 2015 or did not expect it to, the survey by the Centre for Economics and Business Research for Barclays Mortgages found.

Cebr predicts mortgage payments could increase by £81 a year by the end of 2015 as a result of base rate rises.

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If the base rate were to increase sharply, albeit an unlikely scenario, Cebr forecasts typical mortgage payments could increase by as much as £119 annually.

Mike O'Connor, chief executive of charity StepChange, said: 'Many families' finances are on the edge and even a small rise in interest rates could have a serious impact.

'People need to take action now and make sure that whenever those higher repayments come, the end result isn't a downward slide into problem debt.'

Homeowners living in Scotland were the least likely to be putting money away to help offset any interest rate rises, with only 10 per cent doing this.

Those in Wales were the most likely to be saving, with one third putting money aside.

According to industry estimates, around one million homeowners have never experienced an interest rate rise, having climbed onto their first rung of the property ladder while the base rate has been at its rock bottom level of 0.5 per cent.

Speculation has been mounting over exactly when the base rate will start to lift, pushing up borrowing costs, as the economy picks up.

Cebr predicts the most likely scenario is a 'gentle' rise in the base rate, to 0.75 per cent in November.

It has also modelled a 'medium' scenario, whereby the base rate increases to 0.75 per cent in May, as well as a 'sharp' scenario.

Under the sharp scenario, the base rate would increase to 0.75 per cent in May, then to one per cent in August and to 1.25 per cent in November, before increasing in 2016 to 1.5 per cent in May, 1.75 per cent in August and 2 per cent in November next year.

Regionally, Cebr predicts homeowners in the South East will see the biggest increases to their mortgage payments as interest rates start to rise.

The research also predicts Londoners could see a slight decrease to their typical mortgage payments by the end of the year as property values in the capital are expected to dip following the strong growth in prices seen there last year.

HOW VARIABLE RATE MORTGAGE REPAYMENTS COULD INCREASE

Here is how the different scenarios for potential interest rate rises could impact on annual variable rate mortgage repayments by December 2015 in each region, according to the research: